Immedia Group Announcements

RNS Number : 4910E Immedia Group PLC 29 September 2008  
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29 September 2008

IMMEDIA GROUP PLC

INTERIM RESULTS

Immedia Group Plc, the UK's leading provider of live, tailored in-store radio and TV, today announces its interim results for the six months to 30 June 2008.

Operational Highlights

Reduced operating loss of £115,423 compared to 2007 loss of £1,109,326

New contracts include Roadchef and we now provide HSBC Live! to over 1,000 branches in the UK

Provision of new installation and maintenance services making good progress

Tight control of costs

Increased cash in bank to £645,143 as at 30 June 2008 (£489,951 as at 30 June 2007)

Strong pipeline of new business
Financial Highlights

Unaudited
Half year to
 30 June 2008
Unaudited
Half year to
 30 June 2007
Revenue
£ 1,608,872
£ 2,015,345

Operating loss
£ (115,423)
£ (1,109,326)
Underlying operating loss 1
£ (115,423)
£ (142,104)

Impairment charge on intangible assets
£ -
£ (1,017,000)

Loss before tax
£ (101,535)
£ (1,104,517)

Basic and diluted loss per share (pence)
(0.71)p
 (8.04)p

Cash and cash equivalents
£ 645,143
£ 489,951

1 The underlying data excludes in 2007 the exceptional contribution from Alphyra and the impairment charge against Cube intangible assets.
  Bruno Brookes, Chief Executive of Immedia, said:

"Immedia has made significant steps in 2008, the benefits of which will be seen in 2009. In particular, our Radiovision offer is attracting great interest as companies seek new ways to win customers in an ever more competitive market.  

"Our strong pipeline of new business leaves us well placed to make further progress by the year end as we move towards profitability."

Immedia Group Plc

Bruno Brookes - Chief Executive
+44 (0) 1635 572 800

Hudson Sandler

Nick Lyon / Fran Read
+44 (0) 20 7796 4133
Daniel Stewart & Company Plc

Simon Leathers / Simon Starr 
+44(0) 20 7776 6550

Chief Executive's Review

I am pleased to present our results for the six months ended 30 June 2008 and to report on Immedia's progress during the half-year.

Results

In the first six months of the year, Immedia has continued to focus on cost control and profitability. Revenue for the period was £1,608,872 (2007: £2,015,345) with the underlying operating loss reduced from £142,104 to £115,423.  Despite operating in a challenging retail environment, we are pleased to have continued our move towards profitability.

The decline in revenues is largely due to the impact of the loss of contracts in 2007 and in part to the reduction in value of certain trials in 2008. However, we are already seeing the benefit of new contract wins which will replace the revenue lost from ceased contracts. In addition, we have ceased our loss making free radio service to independent retailers.  

We are pleased with the development of the Immedia product and in particular that of Radiovision.  In addition, our visual creation business, which was part of our Cube acquisition, is developing well and is already working with a number of companies on pre-contract development work.

Costs continue to be tightly managed and the Group remains cash generative with £645,143 cash in the bank at 30 June 2008 (30 June 2007: £489,951).
Subscription Stations

Our subscription radio stations continue to perform well, with new opportunities to help our clients with new product development.

We have also won some significant new business. On 2 June 2008 we were delighted to announce a two year contract with Roadchef to provide a brand new live radio station to all 29 Roadchef motoring service areas in the UK. This station was successfully launched in June 2008.

In July we announced a significant memorandum of understanding with a leading retail brand. The trials of our Radiovision product with this company have been very successful and we expect to announce the signing of a contract in due course.

We continue to work closely with HSBC following the roll out of the HSBC Live! subscription radio station, which is now broadcast to over 1,000 branches across the UK and other HSBC buildings, and we look forward to developing our relationship with them further.  Our strong relationship with SPAR has seen the introduction of a subscription model to circa 1,400 stores across the UK, replacing the free to air service. This has resulted in a lower cost base as well as an increase in revenue.

We continue to broadcast GAME Live! to approximately 370 GAME stores across the UK, having moved on from pre-contract trials and installations in 2007 to a full subscription service in the first half.  

Our installation and maintenance services continue to grow, with a number of new clients initially seeking ad hoc services. Over time we expect a number of these clients will look to sign longer term contracts.

IKEA Live! has been well received across all its 20 UK stores and we are looking forward to working with IKEA on the next phase of its IT programme as it moves its radio service from satellite to broadband.

Lloyds Pharmacy Live! operates across all 1,500 stores and, with our renewed contract, we are exploring further opportunities to assist with new product development.

We are currently trialling other radio stations and believe that our breadth of offer will continue to attract new clients.
  Outlook

Immedia has made significant steps in 2008, the benefits of which will be seen in 2009. In particular, our Radiovision offer is attracting great interest as companies seek new ways to win customers in an ever more competitive market. 

Our strong pipeline of new business leaves us well placed to make further progress by the year end as we move towards profitability.

Bruno Brookes
Chief Executive

Consolidated income statement

Unaudited 
Half year to 
30 June 08 
£ 

Unaudited 
Half Year to 
30 June 07 
£ 

Year Ended 
31 Dec 07 

£ 

Revenue

1,608,872

2,015,345 

3,904,815

Cost of sales

(667,262)

(862,955)

(1,691,821)

Gross profit

941,610

1,152,390 

2,212,994

Administrative expenses before impairment charge on intangible assets
(1,057,033)
(1,244,716)
(2,533,678)

Impairment charge on intangible assets

-

(1,017,000)

(1,055,225)
Operating loss

(115,423)

(1,109,326)

(1,375,909)

Finance income

13,911

5,933 

22,374

Finance expense

(23)

(1,124)

(1,875)

Loss before taxation

(101,535)

(1,104,517)

(1,355,410)

Income tax

-

- 

72,750

Loss for the period attributable to equity shareholders

(101,535)

(1,104,517)

(1,282,660)

Continuing operations
Loss per share - basic and diluted 

(0.71)p

(8.04)p

(9.13)p
There was no income or expense for the current or comparative periods other than that reported in the consolidated income statement.
  Consolidated Balance Sheet

Unaudited 
as at 
30 June 08 

£ 

Unaudited 
as at 
30 June 07 

£ 

As at 
 31 Dec 07 
£ 

Assets
Property, plant and equipment

154,253

367,709 

208,837
Intangible assets 

334,176

408,910 

377,190
Total non-current assets

488,429

776,619 

586,027

Current assets
Inventories - work in progress

756

- 

3,703
Trade and other receivables

670,416

628,792 

675,975
Prepayments for current assets

178,251

163,892 

151,550
Cash and cash equivalents

645,143

489,951 

661,845
Total current assets

1,494,566

1,282,635 

1,493,073
Total assets

1,982,995

2,059,254 

2,079,100
Equity
Share capital 

1,455,684

1,455,684 

1,455,684
Share premium

3,586,541

3,586,541 

3,586,541
Merger reserve

2,245,333

2,245,333 

2,245,333
Retained losses

(6,814,264)

(6,534,586)

(6,712,729)
Total equity

473,294

752,972 

574,829

Liabilities
Deferred tax liabilities

12,480

- 

12,480
Total non-current liabilities

12,480

- 

12,480

Loans and borrowings

-

9,196 

-
Trade and other payables

1,408,243

1,196,836 

1,416,926
Deferred income

88,978

100,250 

74,865
Total current liabilities

1,497,221

1,306,282 

1,491,791
Total liabilities

1,509,701

1,306,282 

1,504,271
Total equity and liabilities

1,982,995

2,059,254 

2,079,100

  Consolidated statement of cash flows

Unaudited 
Half Year to 
30 June 08 
£ 

Unaudited 
Half Year to 
30 June 07 
£ 

Year Ended 
31 Dec 07 
£ 

Cash flows from operating activities

Loss for the period attributable to equity shareholders

(101,535)

(1,104,517)

(1,282,660)
Adjustments for:
Depreciation, amortisation and impairment
132,375 
1,296,821
1,582,278
Financial income

(13,912)

(5,933)

(22,374)
Financial expense

23

1,124

1,875
Loss on sale of property, plant and equipment
-
19,138
19,138
Deferred tax credits

- 

- 

(72,750)
(Increase)/decrease in trade and other receivables
(21,142)
436,750
401,909
Decrease/(increase) in inventories

2,947

2,409

(1,294)
Increase/(decrease) in trade and other payables
5,430
(382,679)
(187,973)

Net cash from operating activities

4,186

263,113

438,149

Cash flows from investing activities
Proceeds from sale of property, plant and equipment
-
1,753
1,753
Interest received

13,912

5,933

22,374
Acquisition of property, plant and equipment
(34,777)
(12,833)
(22,469)
Net cash from investing activities

(20,865)

(5,147)

1,658

Cash flows from financing activities
Interest paid

(23)

(1,124)

(1,875)
Repayment of borrowings

-

(7,124)

(14,104)
Payment of finance lease liabilities

-

(2,562)

(4,778)
Net cash from financing activities

(23)

(10,810)

(20,757)

Net (decrease)/increase in cash and cash equivalents
(16,702)
247,156
419,050

Cash and cash equivalents at beginning of period
661,845
242,795
242,795

Cash and cash equivalents at end of period
645,143
489,951
661,845

    Notes to the consolidated financial statements

1. Reporting entity

Immedia Group plc (the "Company") is a company incorporated and domiciled in the United Kingdom. The address of the Company's registered office is 8-10 New Fetter Lane, London EC4A 1RS.  
The consolidated financial statements of the Company as at and for the six months ended 30 June 2008 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group primarily is involved in marketing and communication services through radio and screen based media. 

2. Basis of preparation

These consolidated financial statements for the six months ended 30 June 2008 are unaudited.  They have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").  

On the basis of current financial projections prepared up to the end of 2009, recent news of contract renewals, continuing improvements in management of costs, and ongoing availability of facilities, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and consequently the financial statements have been prepared on the going concern basis.

The financial statements were approved by the Board of Directors on 26 September 2008.

3. Significant accounting policies

The accounting policies set out in detail in note 3 of the Group's consolidated financial statements to 31 December 2007 have been applied consistently to these unaudited financial statements to 30 June 2008, including:

(a) Revenue
Revenue represents the amount invoiced by the Group for the provision of media services and their related equipment in the normal course of business, excluding value added tax. Revenue from these services and equipment is recognised on the date of broadcast or delivery. Sponsorship and promotions revenue is recognised over the life of the contract.

(b) Taxation
Income tax expense comprises current and deferred tax.

Recognised deferred tax liabilities are attributable to intangible assets. The Group also has potential deferred tax assets arising in respect of temporary differences between capital allowances and depreciation; these have been added to accumulated trading losses. The deferred tax asset created by the Group's residual trading losses has not been recognised due to the uncertainty of the timing of its eventual crystallisation.
  Notes to the consolidated financial statements
4. Property, plant and equipment

Plant and
Fixtures and
Network
Total

equipment
fittings
equipment
£
£
£
£
Cost
At 1 January 2008
679,827
349,258
657,377
1,686,462
Additions
10,879
21,766
2,132
34,777
Disposals
-
-
-
-

             
             
                  
                 
At 30 June 2008
690,706
371,024
659,509
1,721,239

             
             
                  
                 
Depreciation and impairment losses
At 1 January 2008
654,536
296,580
526,509
1,477,625
Charge for period
17,590
25,360
46,411
89,361
On disposals
-
-
-
-

             
             
                 
                 
At 30 June 2008
672,126
321,940
572,920
1,566,986

             
             
                 
                 
Carrying amounts
Unaudited at 30 June 2008
18,580
49,084
86,589
154,253

             
             
                  
                 
At 31 December 2007
25,291
52,678
130,868
208,837

             
             
                  
                 
Unaudited at 30 June 2007
48,555
64,883
254,271
367,709

             
             
                  
                 
  Notes to the consolidated financial statements

5. Intangible assets
Customer
Video 
Goodwill
Total

relationships
library

£
£
£
£

Cost
At 1 January 2008
566,880
126,000
1,173,310
1,866,190
Additions
-
-
-
-
At 30 June 2008
566,880
126,000
1,173,310 
1,866,190

Amortisation and impairment losses
At 1 January 2008
493,375
21,625
974,000
1,489,000
Charge for period
36,750
6,264
-
43,014
At 30 June 2008
530,125
27,889
974,000
1,532,014

Carrying amounts
Unaudited at 30 June 2008
36,755
98,111
199,310
334,176

At 31 December 2007
73,505
104,375
199,310
377,190

Unaudited at 30 June 2007
116,700
92,900
199,310
408,910

  Notes to the consolidated financial statements

6. Trade and other receivables

Unaudited
as at
30 June 08
£

Unaudited
as at
30 June 07
£
As at
31 Dec 07
£
Trade receivables
585,365

560,131

593,250
Other debtors
85,051

68,661

82,725

670,416

628,792

675,975

As 30 June 2008 trade receivables are shown after a provision for impairment of £10,025 (31 December 2007: £15,218; 30 June 2007: £91,753) arising from disputed charges.  £84,500 of the June 2007 provision was released in 2007 following recovery of a disputed debt.  All debts are due within one year.

At 30 June 2008 the totals of trade receivables past due, net of provision for impairment, were as follows:
Unaudited
as at
30 June 08
£

Unaudited
as at
30 June 07
£
As at
31 Dec 07
£
Up to 3 months past due
274,405

69,288

344,084
Over 3 months past due
73,157

249,925

58,847

347,562

319,213

402,931

7. Cash and cash equivalents
Unaudited
as at
30 June 08
£

Unaudited
as at
30 June 07
£
As at
31 Dec 07
£
Bank balances
1,175

8,218

1,143
Call deposits
643,968

481,733

660,702
Cash and cash equivalents
645,143

489,951

661,845

  Notes to the consolidated financial statements

8. Capital and reserves

Reconciliation of movement in capital and reserves
Share capital
Unaudited
as at
30 June 08
£

Unaudited
as at
30 June 07 £
As at
31 Dec 07
£
Authorised

36,000,000 Ordinary shares of 10 pence each
3,600,000

3,600,000

3,600,000 
Allotted, called up and fully paid

14,556,844 Ordinary shares of 10 pence each
1,455,684

1,455,684

1,455,684
Movements in period

At beginning of period
1,455,684

1,334,056

1,334,056 
(2007: 1,216,281 Ordinary shares of 10 pence each issued in period) 
-

121,628

121,628 
At end of period
1,455,684

1,455,684

1,455,684 
Share Premium and Reserves

Reserves as at 30 June 2008
Share premium account
£

Shares to be issued
£

Merger reserve
£

Profit 
& loss account
£
At 1 January 2008
3,586,541

- 

2,245,333 

(6,712,729)
Retained loss for the period
-

- 

- 

(101,535)
Unaudited at 30 June 2008
3,586,541

- 

2,245,333 

(6,814,264)

Reserves as at 31 December 2007

At 1 January 2007
3,525,727 

237,175

2,245,333

(5,430,069)
Retained loss for the year
- 

-

-

(1,282,660)
1,216,281 Ordinary shares of 10 pence each issued in year
60,814 

(237,175)

-

- 
At 31 December 2007
3,586,541 

-

2,245,333 

(6,712,729)
  Notes to the consolidated financial statements
9. Trade and other payables

Unaudited
as at
30 June 08
£

Unaudited
as at
30 June 07
£
As at
31 Dec 07
£
Trade payables due to related parties
6,190

14,939

3,848
Other trade payables
581,958

420,670

737,937
Other taxation & social security
149,952

145,969

144,547
Non-trade payables and accrued expenses
670,141

615,258

530,594

1,408,241

1,196,836

1,416,926
10. Loss per share

Unaudited
as at
30 June 08
Number

Unaudited
as at
30 June 07
Number
As at
31 Dec 07
Number
Weighted average number of shares in issue
14,556,844

13,956,776

14,260,271
Less weighted average number of own shares
(213,500)

(213,500)

(213,500)
Weighted average number of shares in issue for basic loss per share
14,343,344

13,743,276

14,046,771
The loss per share is based on the loss after tax of £101,535 (30 June 2007: loss of £1,104,517; 31 December 2007: loss of £1,282,660) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods: 30 June 2008: 14,343,344 shares (30 June 2007: 13,743,276 shares; 31 December 2007: 14,046,771 shares).  

The weighted number of shares used for the diluted loss per share is calculated after reflecting the outstanding share options at the period end. But in accordance with IAS 33 the diluted basic loss per share is stated as the same amount as basic as there is no dilutive effect.
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